now it's time for "call to action" on stocks to watch during afternoon trading. cnbc's matt nesto is here with a look. hello, matt. ? hey, larry. you know what's interesting, there is a dow derby. we have four dow members that have reported. two up, two down at last check. the intraday turnaround of dupont. it opened down low and it is moving higher. it's about 0.8% higher, but verizon continues to be the worst performer in the dow today and travelers, one of the best. if you take a look at the interday battle between insurers and the telecoms, well you've got one up and one down, both by about the same amounts and those two stocks are having a spillover effect right on

through their particular industry groups. take a look at u.s. steel. that stock has shed more than 20% since earnings season began with alcoa on january 11th. oh, that's just hideous. another 9% giveback here today. just nothing good coming out of the big x. zion, the same cannot be said. the company certainly turning it around overnight with a big strong, after-hours report. try to beat me. catch me if you can. 53% higher already in 2010 and lastly, rise of the retailers. we saw flight from discretionary yesterday and they are none more than barnes & noble at the top of the russell 1,000 here today. they might be including their e-platform might be included in the apple tablet. guys, back to you. >> the dow is up 55 and that will do it for us here on "the call." i'm melissa francis. >> i'm larry kudlow. see you at 7:00 p.m. eastern on "the kudlow report." "power lunch" is up next.

thank you very much, larry. welcome, everyone, to "power lunch." i'm tyler matheson. stocks marching higher after better-than-expected consumer confidence data. financials, as matt nesto just pointed out with respect to the insurers among the best performers, telecom, as he pointed out a moment ago, among the losers. >> i'm sue herera. president obama said to impose a massive federal spending freeze, right idea, perhaps, but it will have the wrong outcome? new forecasts about the nation's out of control deficit. we'll have all the numbers. >> i'm dennis kneale, treasury secretary tim geithner in the hot seat tomorrow testifying about the aig bailout. is geithner good for your money? take our power poll and post your opinions at cnbc.com. over 5,000 of you already have some vitriolic stuff. we'll keep updating you with results throughout the show. >> first, though, let's get straight to the market action. stocks are higher about 55 points to the upside.

ibm, american express and walmart among some of the dow winners. bob pisani is down at the new york stock exchange with the details. >> hi, bob. >> hello, sue. highs for the day and advance-decline line about the same as yesterday and not as high as it was on the down days in thursday and friday and those comments by china trying to slow lending is definitely hurting commodities and commodity stocks. you know about apple reporting better than expected numbers and tellabs also did very well as did texas instruments and they're helping move the nasdaq forward and tech stocks in general. steel's been a disappointment. u.s. steel that's been in the flat roll business. automotive had a problem with their numbers below expectations. it looks like market conditions are not improving that much. we also saw some interesting moves in the regional banks and put those regional banks because they did numbers that were a little bit on the disappointment side, bigger loss than expected. zions is up over 10%. tyler, back to you. >> bob, thank you very much.

president obama set to unveil a huge federal spepeg freeze in his state of the union message tomorrow night. we also have new forecasts on the nation's budget deficit. our chief washington correspondent john harwood has the details. john, so take us through it. the deficit numbers are really shocking. >> well, they're shocking. they're slightly less shocking than they were before the omb came up with this number. we have a $1.3 trillion deficit forecast for 2010. a little over 9% of gdp that is smaller than the 1.4 trillion last year in the earlier omb estimate and the key word for the obama administration today is freeze. the president's aides put out the word in an embargo briefing that the president would propose a three-year freeze on domestic discretionary program that did not inrovolve security. not the home lann security department. this would affect 17% of the

federal budget. a very limited scope and it would save $250 billion over ten years. just $10 billion or $15 billion is the difficult balancing act. the president will also talk about in the state of the union about the bipartisan commission that's been talked about on capitol hill, but at the same time he's pushing new jobs, legislation and that's going to be a focus of democratic activity this year, trying to get the unemployment rate now 10% down below that, tyler. we'll see how much success they can have getting the jobs bill through and actually seeing some results from that. >> yes, john, as you know, we had senator conrad on yesterday talking about the bipartisan-proposed commission that would create, if all goes according to his plan, a binding -- >> very con ro veshl. the house people don't like that. they don't like the idea and many republicans don't like it either because you've got the requirement in a commission of

that kind that people vote for solutions that everyone expects will involve painful spending cuts, but also tax increases and the extremes of the political spectrum don't like either one of those. >> john, stay with us, as we are joined by jimmy pathkoukas at reuters and senior fellow for the professor of public policy. welcome to you both. >> let's talk about the idea of a spending freeze on discretionary items in the budget. >> if you really want to cut spending, professor, why don't you just not spend the additional $400 billion that was approved in last year's stimulus package? >> well, the goal here is the long-term budget deficits and the stimulus package and want the long run is a temporary measure that will phase out. the long run as you look at 2019, 2020 when the budget deficits are projected to go up again towards 3%, exceeding 3% of gdp according to the cbo numbers we've seen today. so what you need is you need to

make some hard choices both on the revenue side as well as on the spending side in the long term. the problem is this is a discussion that redwyers tough choices and an honest discussion that doesn't lend itself to buzz words. your spending cuts and the spending cuts itself won't get it. >> there are no tough choices here, because you know what? we have the $60 trillion in long-term liabilities and 40 trillion of that is social security and medicare. here we're talking about a very small amount. if it you run the numbers for 2011 according to the cbo. we'll have a deficit gdp ratio of 6.53%. with the obama freeze, it will be 6.43%, a 0.1 percentage point. >> let's step in. the obama administration is not saying this is the only fix. clearly the obama administration has laid out other benchmarks. clearly health care reform is supposed to address some of the structural deficit cost.

>> sure it will. >> but -- christian -- >> that's what the honest discussion has to be. conservatives have to face the fact that health care reform is one. >> wait, guy. how can anyone take this seriously. i can please speak? how can anyone take this budget freeze seriously with it doesn't, i read, address medicare and social security in any way at all and when today, i believe, the administration's coming out with an $80 billion job program when the stimulus was supposed to create the jobs. christian, how can we take it seriously? ? you're confusing the long run with the short run. in the short run you have a massive problem in the economy. you've got to step in because the private sector is not creating these jobs. you have to stimulate the economy in the short run. you have to address it in the same time. the long-run, structural problem and that requires health care reform. >> what's long-term about a three-year freeze and that doesn't seem particularly long

term. >> it's the beginning of a down payment, but the problem is you have to see it in the larger picture that the obama administration has been willing to make tough choices to talk about revenue and to talk about spending on the health care side. they have said in the past they want to address social security after health care reform is done. this is another piece of the puzzle. it's not the only piece, but you're got to give the administration credit for being willing to take on some of the constituencies and talk about these issues. >> it does represent, does it not, a way of doing business to a certain extent in washington especially given the midterm elections coming up. it is a different way of approaching it, is it not? do you give them credit for that? >> well, look, it is a step. it is a small step and the difference, you know, every time administrations get in trouble over deficits which we've seen repeatedly over the last generation, really, beginning with ronald reagan and then with the first president obama and then with president clinton. you get talk about freezes

because that's an easy thing to talk about and an easy thing to communicate and we can't forget the other side which i mentioned in the report before. they are going to address the long-term and whether they can get cuts in social security, long-term cuts in social security and medicare beyond what's in health care. that's the question and they're going to try to do that. this is not being advertised by the administration as their fix for the deficit. it is a step. >> gentlemen, thank you -- >> let's step in, christian, quickly. >> the clinton and bush administration showed how you can reduce the deficits. part is revenue increases and parts is sensible spending cuts, but it takes time and it is something that requires a massive, national honest discussion and not just the buzz words that we hear in the last few days. >> thank you all. the head of the congressional budget office will be on "street signs" this afternoon with erin burnett to talk about the deficit forecast and that's 2:00 p.m. eastern time. >> let's get to the market reporters and let's begin with sharon epperson at the nymex. >> with all of the major stock averages higher, we have seen

oil follow suit. oil has come off of the lows of the session and pared its losses and it was actually below $74 a barrel earlier today. now just under $75. keep in mind as well as we look at what happens with the inventory report from the american petroleum institute this afternoon and from the department of energy tomorrow. we are expecting to see further build in crude and gasoline so that could put more pressure on oil prices. natural gas option, the pit i'm standing in right now expire today. warmer forecasts and that is pressuring natural gas prices and also the expectation from a lot of traders and that we'll see a withdrawal of less than 100 bcf and keep in mind the last two weeks we had big withdrawals and well over 200. this is another thing that's pressuring natural gas prices and gold, when we talk about the strength that we're seeing in stocks. we're also seeing strength in gold stocks and that might be helping to propel gold futures above the $1100 mark. sending it now over to rick

santelli. >> thank you very much, sharon. indeed, before we even get to the chart, something happened today. i believe it's the seventh time it's happened and we had a one-month bill auction that ended with goose egg, goose egg.goose egg for a yield. the temporary parking lot is firly savvy. investors want to wait out. the uncertainy is beginning to be a temporary to permanent structure. as far as the chart, 11:00 eastern when you're up close you always get dollar moves and you see it clearly on the intraday. these could be the highest levels we're going to see since september with regard to dollar index and if you look at the ten-year note rates and they're only three basis points higher than basically a one-month low yield close. let's go to bertha who is at the nasdaq marketsite. >> thanks, rick. we saw tech stocks sitting on side lines this morning as the market was pulling back. things have turned around and apple powering forward. apple's one-year high is at $211

and change on the back of woorts been strong earnings and strong reaction from the street. meantime, it's kind of moving over across the rest of the big caps a bit. we have amazon higher ahead of its earnings on thursday and the chip stocks are also providing the strength with applied material getting an upgrade at citi. tyler, back to you. >> thank you very much, bertha. another big day for earnings, four dow components weighed in earlier today and i'll head over to earnings central and the fictional place that exists in our mind and have all of the details for you. we'll ask the market insiders what's driving the market. the fed kicking off a two-day meeting on interest rates, but with the cloud over the appointment of ben bernanke be a distraction at that meeting. >> apple is set to unveil its latest creation and we'll get the buzz ahead of that announcement. >> get ready for the "fast money halftime report," you're watching "power lunch" on cnbc, first in business worldwide.

markets up about 61 points and a number of key dow components reporting today and some other, a couple of good ask a couple of bad. >> four key dow components and the best of them was travelers. a strong profit growth there across all of their business lines. the eps. >> that's significant. >> boosted by 60% profits. j&j, the sales were pretty good

and they're dealing with structuring charges and that returning to profitability ahead of some analyst forecasts and some are interpreting that report pretty positively. not so much verizon. it was in lip and added mobile customers. that's the good news and the less good news, a lot of the fixed line customers fell away. dupont, pretty strong sales raising 2010 guidance and revenues were strongly higher there. >> let's go beyond the dow and look at a couple of other hits. tellabs, up 10% and profit 62 million, baker hughes. that one moving higher. the ceo sees signs of stabilization adding to the rig count. earnings were lower than a year ago and profit in sequential quarters was up proved. u.s. steel, an unmitigated problem there. shares down worse than expected-loss, and a troublesome first quart perp let's look, shall we? is. >> yes.

>> you have no choice in this. >> i'm just the place card, basically. you're doing all of the work here. companies have reported 80% beaten eps and 65% have beaten on revenues and the average revenue growth is 12%. so if you're looking for signs of improving sales and say, well, were these earnings gains just cost-cuts or it was organic? you have organic growth there. the blended earnings growth. don't ask me to explain it, but those who know know up 186%, but if you sweat out the financial. >> 11%. >> that's a number that takes the actual numbers reported and the analyst consensus of the forecast for those that remain. >> the question is why isn't the market focusing more on earnings and perhaps the market guests can talk about, that right, dennis? >> right. let's bring in our "power lunch" market insider for his take on what's moving the markets. joe can han at td ameritrade. let me cut to the simplest question of all.

the market's good or the market's bad? >> i would say market overall good. >> of course, some warning signs right now, but i think you're seeing in the vix today that the market is taking a breath from the information overload over the last three or four trading days. >> the markets over the last three or four days is self inflicted. >> you ng of all that's come out and the white house has disparaged bankers and things like that over the last few days and i think the market's taken a break. what we saw in apple last night gave the market confidence overall and we're seeing good earnings particularly if the dow stocks right now. ? sue talked about earnings and investors quickly say they cut way back and of course, the earnings are upon up and 65% of the companies have beat on revenue expectations and that's got to be a strong sign. >> looking at what retail customers are trading on td ameritrade, we saw telecommunications was one of the biggest sectors we went in of which verizon was one as you

referenced over there and you talked how people have had financials and things like that. >> that's one of the areas y where our customers have gotten out of. >> are you surprised that the market hasn't been able to focus companies that have had organic growth or is it the washington overhang that seems to be pushing earnings regardless of how good they are to the side. i think the news out of washington on thursday and friday, people were, like, what about what wash's going do? what about what washington's going to do? one of the rumors we're starting to see again is there might be restrictions on short selling again. whenever there's uncertainty people naturally gravitate toward pushing a stock. >> apart from the instant uncertains of today, of this week, are your customers excessively risk averse because of what they've gone through over the past couple of years? are they holding back and

ultimately will they come back into the marketplace when they say i can't live on 0% returns on the fixed income. >> i think, yes, they will definitely come back. i think we're starting to see people come back. >> originally you come back with a toe in the water, so to speak and you go with a foot and things like that. >> a lot of them lost a leg. >> i agree. so when you come back, they'll come back smarter and they're taking a swimming lesson, so to speak right now. >> they're learning how to right calls. >> that's why your options business is up so big. >> even if the stock doesn't move. they make money on either side of the trade. >> putting a limit order. people are starting to come back in a much smarter way for the market. >> all right. >> always a pleasure. >> nice to have you here. >> coming up next, that fed meeting, it's today. no rate hike expected. as a matter of fact, the big elephant in the room is ben bernanke's future and what about political pressure on the fed? we're going to talk about that.

>> and the markets are so-so today and the dow is up better almost 60 points to 10, 253. and the s&p is hanging in there, a little bit green. more ahead.

>> sherwin-williams painting the boards green, up $4 a share there, nearly 7% and target up 3% at $52.18. 52-week highs for those two. a huge cloud over the fed as it opens a two-day meeting on interest rates. the unanswered questions is will bernanke get another term or will the fed remain independent. >> joining us to talk about that is cnbc steve liesman. >> steve, i'll start with you, why don't you give us the latest vote count. >> the late of the official cnbc vote count is 37 in favor and i believe just 16 opposed. that number's been the opposition -- opposition has been constant for several days now. the yeses have been rising. we have the democrat, and if you

break it down by party, the four democrats who originally opposed on friday which got everybody nervous, that remained unchanged. there it is, 26-4. the 44 came out and everyone got excited. the public is split 50/50. that's 86, 87% in favor and if you play it it ends up being 70-30 for bern arching. >> you probably read it, but for those who haven't read the op ed in the journal today by richard fisher of the dallas fed, we took one quote from the very end of it which basically is what a lot of people are thinking is if congress tachlers with the independence of the federal reserve it will move us toward politization of the central bank, of the world's greatest economy putting the u.s. on a road that leads directly to economic ruin. do you agree with that and how damaged has the fed become by this whole political debate in washington? >> all i can say to president's fisher's statement is amen.

i think in some ways, the spectacle of the bernanke vote is really more about the fed as an institution than it is about chairman bernanke himself. >> i mean, i think he's done a good job. he's probably the guy for the job and even if you disagree with that point, congress interjecting themselves the way that they have into the workings of the fed is i think, something that has the markets nervous. >> has it jeopardized their independence? >> that's at risk. i wouldn't say we're there yet. there's legislative activity that will take place over the course of the year. my guess is that most threatening initiatives that are on the board are probably not going to pass. so i think at end of the day the fed will lose regulatory turf, for example, i don't think their independence will be fundamentally sacrificed. >> steve liesman. let me suggest something, but are we being too precious here? has the fed never been autonomous. has it been beholden to the president that appoints them to

the politicians and the public that wants easy money to help the economy. >> i go further than that, dennis. that is always true, but what i think we've all realized and i certainly have a bit of education here is you think of the fed as this edifice and this institution that's out there. i'm not sure after this affair here that that's the case anymore. i believe that in the month ahead for the fed to get back the reputation it had as an independent institution, an actual accord is going to be needed either between congress and the fed and certainly between the fed and the treasury which is something that has been done over the years when things got out of line. the fed's going need something to get back the mismystique of independence that it had along with whatever the reality was. >> if the fed gets involved in a much more broadway in regulating the banking system and being the systemic regulator, can they ever be isolated from politics in the way they have been? ? i don't think so, but the question is when they take something that is not a treasury on their books it immediately

becomes political. i want to give steve stanley a chance to talk about that answer as well. that's fair enough. a lot of what the fed has had to do isn't what we think of as monetary policy and is closer to fiscal policy, and i think that's why congress feels like they have the right to get him more involved. >> stephen, no chance that the fed appeals back a little bit today on x and x, you know? it's been low for the extended period, these interest rates? >> think it's too early for that. right now they're focused on trying to get to march 31 in finishing up the mortgage-backed program and hoping the end of that program isn't too disruptive. >> stephen, how much is the political rhetoric that's ongoing capitol hill influence their decision making at all or can they isolate their digz and the language and the statement, et cetera from the rhetoric? >> i think they'll make a conscious effort to try to avoid anything that looks political.

i would say, i do think the political pressure will ebb as the economy improves. as the unemployment rate comes down and as people feel better about things and my hope, at least and my expectation and more so my hope is that as the year goes on and the economic situation gets better, that the pressure on the fed will abate and so when the fed does what it needs to do they'll deal with the political repercussions. >> thanks steve liesman. is secretary geithner good for your money? you can voice your view. take our power poll. post your thoughts. cnbc.com. we've had almost 5,000 responses so far. we will tell you about those responses and give you a sampling of some of the rhetoric. >> some of you are fired up. >> rhetoric would be the nice word for it. >> up next, the hot topic for investors. the apple tablet, what will it do? what will it mean for the stock? we have a task force ready to go out on a limb.

>> coming up at 12:45 eastern, not moezs. melissa. >> yes. i am coming from the mountaintops. on the "halftime report" todd, we're seeing a flat line in the markets, but is this the calm before the storm? we'll head to the charts to see whether or not a correction is on the horizon. also we will take our position for yahoo!, earnings which are out after the bell today. all of that and much more on the halftime report and first more "power lunch" right after this. with an a+ credit rating in good times and bad,

sun life financial should be famous. we're working on it. so you're seriously proposing we change our name to sun life valley? do we still get to go skiing? (announcer) sooner or later, you'll know our name. sun life financial.

all eyes are on apple again. the company, blew past earnings estimates and the focus turns to tomorrow when steve jobs, steve jobs is expected to unveil an apple tablet. now here to tell us what all this means for the company, andy hargraves of pacific crest securities and clyde montt bergen of standard & poor's. you're out with earnings. you listed your price target of $240 for apple. you've still got a buy on it.

aren't you getting sanguine here? a little overly optimistic? >> not necessarily, with the new accounting principles, the way it should have been done to begin with, we think the iphone growth will now be seen. so for the fiscal year we have a 12 -- a $12 eps and if you slap on the 20 multiple which is still in the lower range of historical p-es, it's not that expensive at all. >> enandy, what's your price target on apple? >> a lot of the difference depends on how you treat the cash. if you use the ev multiple, and ev to ebitda. apple is one of the cheapest stocks in large-cap text. here's the thing. any time you're following tech and all of the fish are swimming in one direction, you have to wonder whether all of the fish are wrong. maybe there's too much optimism about apple and how can it possibly live up to expectation? >> that's the bear case right

now is how can it live up to what it's done in the past and what's interesting is people have focused on expectations that we forgot that on an absolute basis, the -- >> clyde, can it keep up growing at 50%? that's what it grew year over year, right? >> it can continue to grow. look at what happened when the ipod was first released and there were a lot of doubters then and we think now it will continue to be a growth story because of the iphone and on top of that which we're going to talk about in a minute, we have new releases that will stir things up. >> does it need to take the iphone beyond the at&t platform? right now we have a forecast that includes just at&t with some modest carrier revenues down the road. we're still not certain and they still haven't announced anything and yes, once they expand to different countries and continue their growth abroad, we still see a lot of growth left. >> andy, how much does the

tablet continue to the bottom line? how big is that going to be? >> we don't know because we haven't seen it yet. you must have an inkling. with the price target, i would assume that the tablet is at some point part of that projection. how big is it going to be? >> it's actually not in our numbers at this point. >> it's not at all. >> let me just refer to the video here. what we're showing, guys, even sports illustrated has been so fascinated by the prospect of the apple tablet and it's come up with its own concept and what sports illustrated stuff is running on the tab sxlt there's an awful lot of hype. it's everything to everyone, andy. >> i'm curious. we've been talking about this for some time now. why would it want be incorporated in your price target and your numbers? everybody's talking about it. >> if you can tell me what's in it and what it's going cost, then i will put it in my numbers. we have ideas and we've run analysis. i think based on what we think is in it, if we do 5 million

units in a year it will add a buck to eps. >> is it in your numbers? >> no, but look at the market research out there and if you look at the mobile devices that are connected to internet, you have 450 million plus units. so yes, it could take the share there and plus you have a very strong apple consumer base. we think if they sell two to three mill in units then you can add 30 to 50 cents in eps. >> wow! there's something that's got to go wrong here, this is too positive of a story even for an optimistic guy like me. >> end, give us your best bet. what can go wrong to get in the waive your wonderful outlook? what can go wrong is if you run out of space to grow in the smartphone market and more threatening would be a price war in the smartphone market because the model is highly sensitive now to iphone and iphone profit ability and if you hurt that profitability, a lot of us that are bulls will be wrong.

>> ju just saved yourself, sir. thanks very much. thanks, gentlemen. >> thanks for having me. >> coming up next, matt nesto is tracking stocks on the move and there are a lot of them and the real-time flash is straight ahead. >> the markets, washington versus wall street and financial regulatory reform and first on cnbc, we'll talk with the ceo of putnam investments. "power lunch" returns in a flash.

hi, folks. welcome back to wto power lunch." i'm matt nesto. stocks have a bit of the momentum behind them and the hmo not happening. how many types have we talked about stocks, the leaders become laggards? look at this, one, two, three, four, five days in a row down. you've shed 7.5%, the morgan stanley health care hmo index. it is down at a time when, well, when the s&p is has fallen about 4% and look at that run-up. it's about 10-1 versus the s&p and if we go back to three

months' time. what's going on here? if you look at briefing.com, they will tell you there are technical issues going on here today, a retracement from the recent run-up that we've seen. you can see right there that pretty much nothing is working here today. oppenheimer downgrading cigna this morning and you can see the rest of them following suit. hmos not involved in the momentum. sue, back to you. >> matt, thank you very much. the president hosting a number of business leaders at the white house today included a gentleman that you see frequently here on "power lunch," ward zuckerman and he owns a number of media companies and also commercial real estate and he is very vocal on it about the obama policy. >> he was not happy with the man he supported. >> yes, he came out in support of the president when the president was running for office. also on that list today, ed rust of state farm insurance and shelly lazarus of ogilvy & mather worldwide. jim hackett of anadarko and

jamie dimon of j.p. morgan. >> we invite mr. dimon and mr. zuckerman to join us if they care to debrief us on that luncheon. >> still ahead. we have the budget, the bernanke vote, obama's bank bashing binge. we will talk about it all with the powerful ranking member of the senate banking committee, richard shelby and one of the biggest guns reporting after the bell and is yahoo!, ready to deliver for investors. we'll have the smart play before and after the numbers come out. >> up next, it's "the fast money halftime report" with the dow at the height of the day up 80 pin thes. back in a minute.

welcome to the kwaft money halftime report. we are getting to the heart of the action as it is happening. a sudden surge in tech stocks carries us high are. are we about to halt a correction in its tracks? let's get to the word on the street. pete najarian. the pit boss monster.com and patty ed wars and mike geshger from empower global funds and mkm partners. staring at the apple chart, we are ticking to the session highs. it seems that people are looking past the fact that the iphone number in yesterday's report wasn't as high as some of the bullish estimates on the street looking toward the release of the latest, greatest creation. >> right. >> i really think it is the

focus on the latest and greatest creation to along with seeing stephen jobs himself in the presentation of the tablet or the pad. there are folks on the street that find it to be much more than just another product. this could be a very, very interesting driver for apple going forward in a lot of different ways and it all depends now on the pricing and some of the presentation of what exactly it will do. i mean, there are all kind of speculation out there and jimmy goldman has that completely covered. it's apple right now and it's technology right now. you look over at microsoft and you look at emc and look at vm ware. some of the numbers were strong and we're getting a kind of reaction that you'd like to get from the strong numbers and because of that, along with the consumer confidence, once that came out and we turned this market to sky rocket and the volatility will be crushed. >> i'll play a skeptic and that is my job here. patty edwards, the apple tab sxlt whatever you want to call it, it exists in no category and it's expected to price about $1,000 bucks and who is going

buy this thing? >> well, there's always the early adopters who have to have the latest, greatest thing ask i'm sure pete will pick one up first day, but beyond that, there are going to be some uses for it. i think the folks that have been buying the kindel and carrying their ipod and carrying an iphone, i think if you can wrap more and more things into it, you're going get greater at option. >> pete mentioned a good point, mike burken and that is technology. we've seen bidders come in when there has been a pullback and we have gotten some pretty strong numbers. how do you view the techtrade? >> are you looking at companies exposed in the united states? >> technology just doesn't lead you out of these doldrums, but it also is the spike of ingenuity and entrepreneurship by companies like this that start to lead markets forward. technically right now we're in the s&p and we are wedged between the 100 and the 50-day

moving average so i wouldn't be surprised if we bounced off this bottom, but it will attribute it to one notion of being the apple scenario here. what do i see is overseas. taiwan in particular has taken a hit off of this chinese speculation and they've been tied to technology. so could this be the saving grace? i'm want so sure about that, but at the same time if we're talking about a new product, and let's not forget the bread and butter was the macbook and that's only $500 more. sure, that's true. let's head to the chart of the day because they expressed skepticism. katie, you're a skeptic when it comes to the s&p 500 as a whole. what are you seeing in these charts? >> right, this is a recent development. what we're noticing is that sentiment has become uncomfortably bullish and there's not that many bears out there. looking at the investor polls and that spread between bulls and bears. you can see that that spread has reached a high level that it's not seen since may 2008 and that

tends to send the contrarian message for the market. with the s&p 500 index having now lost intermediate term momentum and not just short-term momentum that suggests we could see a pullback during the seasonally week month of february. >> how big of a fupullback? >> it's 10-10, but it's moving higher over time. >> patty edwards, are you a buyer of apple even with the five-plus percent on the session ahead of the tablet launch. >> boy, i think if you bought before these earnings and before these events, you have always done well. >> like the stock. i think i'm on record saying it could goat $230, we're not there yet. i would pick and choose carefully and maybe listen to pete and take some options and work it that way. i don't know if i would plunge in head first. >> she spoke about options and what are are the options pricin like? >> the thing of beauty going into the next catalyst which

comes tomorrow. volatility, bufz earnings last night, got crushed. about you want to talk about the volatility index coming in take a look at volatility and apple options. because of that, call spreads are cheap, if a person would want to take that route, orr long in the stock, ability to buy protect is incredibly low, that way you can participate if there's more upside. i think we can get to 250, not necessarily tomorrow. >> credit suisse raising price target to 275. retail stocks, the highest consumer confidence reading sins 2008. strength across the board. is this an area you'd even pick on? >> it's hard right now to get excited about this area, only because of where we were and what the expectations are. this is going to be the best quarter in nine when it comes to earnings. i would love to be disappointed saying that my expectations were

low. right now at least it seems spectrum of many different sectors, this is an area pegged to do status quo. maybe this is the blip in the market that pushes united states over in the domestic issue. >> what are the buys, aside from walma walmart? >> you can look at the best operator, look at tjx, a buckle, trading cheap. i like aeropostale, the bargain end of the teen retailing space. avoiding middle markets. avoiding the high end. but i do like nordstrom at these levels. >> pete likes the buckle as well. you bought a buckle from the buckle, in fact, a belt buckle. >> i've got to tell you. she plays into what i think is going on right now when you talk about unemployment and the difficulties with retailers. look at something like the buckle, folks who in general have more discretional spending power with teens going in.

i thick that. i think they can perform. >> the market buzz. china responding to government pressure, chinese banks restrained lending. hong kong down to levels not seen in five months. brian kelly of conundrum capital. what is the best way to play anticipated tightening to come? rate hikes my come and there might be monthly quotas on loans. >> i think probably the easiest way to play it is a trade i put on yesterday i i think it has room. shorting south korea, shorting south korea via ewy. the thing that concerns me about china and the situation, you're seeing exports decline, particularly from the tech areas like south korea. overnight you saw exports down 2% in korea, and that was before china started tightening. that's the best way to go about it. of course the trial dollar

question we have here is to what extent china's tightening is a shock to the global economy. >> would you short the kospi or the brazilian market. >> i wouldn't. i'd be looking for value. i'd be looking at levels here, especially brazil, where you're import driven and export driven out of china through brazil and some of the commodity plays. what happens is you have expectations that this market's going to come off further and you might be able to pick something up really cheap here. it's looking at puts. that's what you're doing. buying the market but this isn't the level you're in it just yet. >> brian, thanks for calling in. see you at the prop desk. tonight on "fast money," after-hours action on yahoo! and the latest on the company's conference call. "power lunch" has $115 billion worth of advice for the ceo of put numbnam investments. the after-hours action will be red-hot tonight. yahoo! gives us another

sector-moving report. we track all of the developments and head to the prop desk to keep you one trade ahead. a housing insider gives us the definitive call. is a foundation of the american economy still in peril? plus the pit got hates clunky technology. will apple's latest creation have him jumping for joy? the smart money says the tablet's on the way, but does it make apple a buy, on america's post-market show tonight. fithe same tools the pros use, so you can be a disciplined trader. by selecting from eight advanced triggers, your order gets executed, even when you're busy. and with trailing stops to help you lock in profits and minimize risk, you can be confident in your strategy, no matter which way the market moves. find out why more and more active traders are turning to fidelity for a smarter way to trade online. trade like a pro. trade with fidelity.

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welcome back to the halft e halftimereport. watching the intraday chart on apple koclosely. it would need to cross 215.59 to set a new high. off the highs of the session off by 4.9%. looking ahead to after the close

today. yahoo! is set to report earnings. pete i talked to an analyst yesterday who said the only catalyst for yahoo! shares would be for alley baba to go public and yahoo! monetizing its stake in ali baba but it's a big if. >> the cost-cutting effort, along with the ad spending coming back into yahoo! carol bartz has it moving into right direction. i don't think they explode but i think they're upside. >> call the close. katie, buy or sell? >> i would sell strength to avoid a deeper correction. >> mike? >> until we get to 1087 look for support. i'm holding, neutral. >> what mike said. >> ditto that. >> pete what do you say? >> volatility's coming in. a great opportunity. we go higher but buy volatility cheaper. an area in the market we'll be talking about later tonight where there's a lot of storage that's come back. now there's a little bit of room to the upside. >> storage, wink-wink.

that does it for "the halftime report." a home builder makes a definitive call on whether or not the housing market has bottomed. sue? we are going to take e-mails on whether or not treasury secretary tim geithner is good for your money. 7,000 of you have responded and interesting comments. go to our power poll, cast your vote. also coming up, first on cnbc interview with ceo of putnam investments. it has 115 billion under management, find out what he's saying about the markets, regulation, retirement, nest eggs and more. still to come on "power lunch" -- >> a senate power player. the rangering member of the banking committee. ben bernanke, bashing the banks, the president's spending freeze and more with richard shelby. yahoo! or boo hoo? innovation from google and apple. nothing new from yahoo!. we'll get you ahead of the

story. the king of all media, no, not howard stern, steve jobs. rev unusualized the music industry. he wants to save the print business with the highly anticipated apple tablet. can he do it all? can he dominate it all? the second hour of "power lunch" starts right now. welcome everybody, to the second hour of "power lunch." michelle caruso-cabrera off today. i think she's back tomorrow. i'm tyler mathisen. consumer confidence rises for a third consecutive month. apple nearing an all-time high in the 215.59 neighborhood. the dow moving up in the past hour. now higher by 85 points. alcoa, travelers, american express, helping the blue chips. i'm sue herera. what do a pink company and a drug distributor have in common?

sherwin-williams and a.amerisource do a.amerisourcebergen. >> is tim geithner good for your money. post your commons at cnbc.com. we are at almost 7,000 responses and growing, guys. >> we're going to talk about that with senator shelby, as a matter of fact, coming up in a short while. find out what he thinks. give him a sampling of what our viewers are telling us. >> a tremendous amount on his plate, starting with bernanke. also with bank reform, financial regulation reform, the so-called volcker rule and the so-called bank tax, the bank fee, for getting out of the tap. >> of the bank t.a.r.p. >> the two-year note auction $44 billion worth of two-year notes. find out what the bid-to-cover ratio. 3. 13-1, which seems on the strong side. but as rick santelli told us earlier this morning, we have seen some pretty decent demand

for some of these issues. we got a zero across the board in one of the auctions in terms of yield, meaning people are looking for that protection. rick is with us now to give us his grade. >> before we get to grade, doug's going to yell directs. i'll tell you why that's important. 3.13 bid to cover, over last ten talkses av bid to cover is 3, three times oversubscribed now. w.i. trading below 88. look at half several days that is "b" range. i'm giving this a "b" plus. i want to see what directs are. 10.8. 10.8 bothers me, and i'll tell you why. if you look at direct bids over the last several auctions we've seen some of the high we've ever seen, 8 to 11. this on the high side of that. i'm going to give it a solid b minus. i don't like to see the directs usurping the indirects until

they're in the 44 area. the reason why is because quite simply i want more outsiders to buy into the auction. >> to buy in, exactly. rick, thank you very much. we'll keep watching the market move to its close to the high of the day, up almost 80 point. we were at 77 before results came in. >> apple with $3 of an all-time high trading in the $215 a share neighborhood, after its big and favorable profit report yesterday. you see the matter horn like climb of apple shares on intraday chart, up $9 ahead of tomorrow's highly anticipated announcement about a new supposed tablet video reader device it does everything, bakes muffins. harry reid announcing there could be a vote on a second term for chairman bernanke thursday or friday. joining us to discuss this as well as president obama's new bank rules is senator richard shelby, republican of alabama,

the ranking member of the senate banking committee. welcome back, senator shelby. always great to have you with us. >> thank you. >> you are going to vote no on mr. bernanke, why, and who or what type of individual would you rather see in that slot? >> first, i'm voting no because i believe that we can do better. i was a big supporter of the fed for 22 years. i presided over as chairman of the banking committee four years agoconfirmation. look back at the actions the fed as a regulator, almost nonexistent. they were the regulator of the holding companies the big banks that got in trouble. they didn't regulate. they weren't involved. i believe we need to send a message. i don't know if we'll send a message by just a lot of negative votes or we'll block this. i hadn't counted votes. i don't remember in history any fed chairman ever being turned down by the senate. >> there has not been one. >> but on the other hand, i

believe that mr. bernanke's probably going to get more negative votes if he's not turned down than any fed chairman in modern history. i think that's a message itself. >> senator, do you think that he could really lose here or are you saying it's a pro test vote to kind of make a symbol here? if he could lose, let's say the market just plunged on that news, do you care about that? >> oh, i think we all care. but you know, markets aren't dependent on one individual, whoever that is. markets go down and they go up. if he was rejected or were to withdraw, would the markets go down? maybe temporarily. but they'll also go up. out of 300 million people i believe there have r. some people that come do a better job as bernanke as the chairman of the fed. >> we have had other people express the same opinion, yet no one will tell us who el they would like to see in the job. who else do you think should be fed chairman if indeed you're

going to vet against mr. bernanke? who else do you want to see in that job? >> well, i think we need to reject him, first. i'm not sure we will. if we were to reject him, then we'll get on a program and i'll have three or four competent people. i have them in mind but that's premature at the moment. >> does worry you, though if he is rejected that donald kohn, vice chairman, would most likely take over temporarily and he has the same leanings, in terms of regulation and approach to the fed, as mr. bernanke does. >> well, that's true. but he'd be temporary in nature. he wouldn't be there long unless he were to be nominated by the president and confirmed. there are a lot of other people out there. you know them and i know them, too, that would be, i believe -- i believe would be stronger fed chairman then what we have today. >> are you sure you don't want to give me a hint? >> i won't give you a hint, because it would be a running story. >> he wanted to. >> you want to, i can tell you want to, i'll get it out of you.

>> how about ben saban of the alabama crimson tide. >> alabama crimson tide did well. i'm proud of them. that's history. i hope next year we do another good job. >> i want to say that it seems, from my perch, that people are very concerned about the politicization of everything in washington. i want to run from this morning one of your senatorial colleagues, a gop member, senator bunting, when he was being asked about mr. bernanke. let's run that tape if we might. i want your reaction to it. >> that should have been done four, five years ago and, of course, obama was not president, george w. bush was president, and he didn't do it. he should have done it. >> they're doing it now. you support president obama on that? >> no, i do not support it. >> hold on. supposed to have been done four years ago, wasn't done, now being proposed and you don't support it? >> the reason i don't is because

it's being done for a political reason rather than a fiscal reason. >> what i think people are worried about senator, there is so much naked politics going on, whether it's bashing banks, of which the administration has been accused, bashing bernanke, of which many people have been accused, or bashing secretary geithner. what do you say to that? >> first, if washington, d.c. politics is everywhere. the fed is not above politics. don't ever kid yourself. their opponent, by politicians, the president, confirmed by politicians, the u.s. senate. they're very much in politics. so that a nonstarter there. but as far as geithner, he is a second of the treasury. he's in politics, deep, deep, deep, up to his eyeballs. >> should he remain in office? >> well, that's up to the president. i think he's been under fire. i try to work with secretary geithner, but i think when he was chairman of the fed in new

york, president of the new york fed he was all involved in this bailout stuff. the american people are totally against that. that's one reason i'm voting against bernanke. >> if you can help me out here, sir. why is it that geithner's staying in office is up to the president but bernanke being reappointed by the president isn't up to the president? >> well, it's not -- well, it's up to the president to appoint him or not appoint him. it's up to the senate to reject or confirm him. >> that's true of the secretary of the treasury, too, isn't it? >> it is. he got confirmed. i tell you this, this is an everyday thing. people will evaluate cabinet members month to month, week to week. >> in our poll we're doing of viewers, of course it's a skewed poll, the most upset will write in. 77%, close to 80% of the people that wrote in to cnbc.com said tim geithner is bad for their money. do you think tim geithner should

step down? >> no i hadn't said that. he works for the president. he also works for the american people. let's see what he's doing. i have called him on account of a number of issues, and we'll continue to do so in the future. >> can he effectively do his job, given the cloud that's over his head? he's the representative on the world stage of the united states government as it pertains to the treasury and monetary affairs. do you think he can be an effective liaison, given the economic circumstances we find ourselves, or is he compromised to the point he will be ineffective? >> an excellent question. the answer is, if he can't do is job, he ought to step aside. >> do you think he can do his job? >> we'll see what happens in the next few weeks. >> let's transition to the discussion of the volcker rule which is a part of your franchise as ranking member of the banking committee. as you understand what the administration is proposing,

would you support such a change? >> i -- i've asked for hearing on it because rhetoric is one thing. the president, dr. volcker having a press conference, announcing we want to hear the ramifications of it on the senate banking committee. i asked senator dodd to hold a hearing. ooh think most of the members of the banking committee would like to see this. i do like this. i do believe that we should protect the taxpayer, and that is the fdic depository's money, from speculation, as much as we can. we realize that everyloan, everything, is speculation and there's risk there. but so from that standpoint, that's why we should have hearings. >> but, senator, if i may, you know, these caps that the obama administration proposes for the biggest banks on their own proprietary trading, on investing and private exequipment, it would have to get rid of that, propriety

trading and the banks investing is not cawing crisis but now we want to restrict the banks. how is it a bad idea? >> i didn't say it was. what i said, i asked for hearings and the banking committee on a proposal to get into the knitty details, to see what the ramifications are. is this good? is this bad? that's what committees are about. i think we would learn a lot. >> senator, you've run, in the past many times, on the idea that smaller government can be a more effective government. and we are pretty much diametrically in the direction the government is growing. we have more agencies, more regulation than we ever had before. weigh in on the administration's policies, the way government has grown and whether you think right now we have an effective government, given its size. >> i don't think our government has become more effective in the last year. it was not becoming more effective in the last year of the bush administration. maui have the gses and we have

them in our lap, we own them. i tried to reform them. we got aig. we've got the automobile companies, more or less, or what's left of the debt, which will never be paid back. we've had too much government intervention. nothing should be too big to fail. the government shouldn't be doing this. that's one of the big reasons i'm going to vote against bernanke. >> senator, do you think -- we talked to a businessman the other day of eaton corporation who said the administration should table every other program it has going now, initial tv, clean energy, et cetera, focus on the jobs and unemployment picture. would you agree? >> i would, i think that jobs, the economy, the health of our banks, turn all of this around. that should be the number one priority of this country because if banks aren't strong, if rn r aren't lending, the unemployment level will go up.

a lot of banks are sick. but to overtax them is not the answer, either. >> freezing discretionary spending for three years a good idea or not? >> 17% of the budget, more politics involved than substance. what we really need is some kind of a citizens committee to come out with something to probably look at everything, including our entitlements which nobody wants to vote on politically. >> senator shelby, always a pleasure to have you with us. appreciate your work. you know what? stocks look like they want to rise. time for a look at what's moving markets. bob pisani. >> reporter: an interesting day. we are sitting at highs for the day but doing it on light volume, like yesterday. this looks likes november and december where we moved up on mixed economic news, case-shiller home price index, fair, not great. consumer of confidence, improving but weak here. mixed economic numbers and earnings reports mixed. take a look at apple. apple's holding of techs, te tellabs had good earnings

report. not far from 52-week highs for apple. the other areas like dupont, for example, generally the other side of the earnings picture. they beat on numbers but prices are lower. they've been under pressure for a while. sales grew more expected. overseas sales are strong. i've been emphasizing this, a company more than 50% of sales are overseas. close to 70% right now for dupont are overseas. >> up next, more than $100 billion under management, putnam a major player in the mutual fund world. markets, regulation and more with the ceo. the dow jones industrial average right now up 77 points, holding off its high of the trading session. up three-fourth of a point. s&p up 5.75.

forget about health care reform. my next guest says 2010 will the year of reforming retirement in washington and for some it couldn't come at a better time when only hoofl americhalf of a invested in a 401 company plan. bob reynolds, welcome. >> thank you. >> we've been talking about the fact that so many people have really been hit so hard in this downturn, but you have your pulse on the really most of

america in terms of its investing. do you find right now that your clients are approaching this market with a better acceptance of risk? a better education as to what risk can do, or are they still risk averse and under exposed to equities? >> i think there is still nervousness out there. a lot of it has to do with uncertainties, certainly in washington, but in the market itself. all that being said, we just did a survey and 75% of americans covered by 401(k) think the market did not have a dramatic impact on the retirement. so -- >> did not? that's interesting. >> yes. and i think a lot of it has to do with the recovery last year of both equity and fixed income, and two-thirds of those said they would go -- be in equities and have equity as part of the investment portfolio. i do think the retirement investor is hanging in there. >> bob what is a bigger threat to the markets and to investor

returns in the next 6 to 12 months? is it that, oh my gosh the economy out there's wobbly we can get into a second recession or threat of government and regulation and in-fighting and bank bashing and the like? >> well, you've shown charts earlier today i think it highlights the point that markets and individuals hate uncertainty. the more uncertainty coming out of washington, obviously the greater impact it has on what investor dozen. i think last year you had a -- 2009 you had a terrific year in both fixed income and equity markets. but most of retail flows went into fixed income. virtually none in equities. this year thus far, we're starting to see people trickle back into equities but again, it's confidence coming from washington's going to affect the investor. the other number that's out there, that i think is so so,

important, there is 11 trillion sitting on the sidelines. and this is money in money market funds and bank accounts waiting to be invested. >> doesn't that speak to the risk aversion aspect? >> to the fear. >> and preservation of capital? willing to take a zero return or close to it, in order to get the return of the capital? >> i think they are sitting with cash on the sideline, there's no question about it. but they're anxious to get back in. again when you look at the returns last year from the equity market and bond market and certainly if you're saving for retirement, earning less than one half percent a year that does not build up a very big nest egg. people must get back in the market. again, according to the survey, what we're seeing in our own participant base, people are getting back in the market and they are investing money in equities. >> what is the single best policy move that the federal government could make to get

americans to save effectively for retirements? >> well, i think 401(k) covers half of working america, and it's a system that is growing over a number of years. it was first set up as a supplemental retirement plan. now it is a primary sort of retirement for majority of americans. one change that was made in 2006 was to make participation a negative election or automatic for participants in these plans. and it was up to each plan to put that provision in place. i think the government today could step forward and make automatic enrollment, automatic escalation, and automatic default to target date funds, age based funds mandatory and would greatly enhance the system. that's for people in it. the discussion that's going on in washington today about simplified 401(k) or universal

i.r.a. is something that should be enacted upon. it's no cost to the government but it would make retirement available to all working americans. >> tyler, i think what bob just said is the way to get americans to save more is to almost absolutely force them to do it. >> you're in unless you -- you're in, basically. >> americans saving rate is going up, bob, right? the numbers are encouraging. >> oh, yeah, savings rates are definitely going. 401(k) has been a big part of savings for some time. however, they do not account any appreciation in 401(k). so, it's just the actual savings rate. and think it it can be a better system going forward. f. we enact changes. >> we have to wrap there. the 401(k) was envisioned as a supplement to traditional pensions and now, most of the time it is -- >> is it the pension -- it is the pension. >> it is. it is. >> thanks bob reynolds, ceo of putnam investments. >> yahoo! ceo carol bart, where

is then know vation? what about earnings? yahoo! reports after the bell. today a preview. >> let's take a look at yahoo!'s chart up more than 40% year-to-date today -- >> microsoft would have paid $33 a share for that thing. >> would have, could have, shoulgd have. 16.06 on yahoo!. d have. 16.06 on yahoo!. tk6t ut

some change. it is within about $4 of its all-time intraday high of $215.59. call it a big quarter for

yahoo!. not only will investors be searching for gains in today's after the bell earnings report they want to size up karl barts' first year has ceo. joining us, martin pieconin, internet analyst at jpmorgan and jim goldman. jim, run it up for us. >> you know, ethink the pressure is on carol bartz. the company's looking for -- the street's looking for 11 cents, $1.25 billion in net revenue. theeainbe. apodnterto si is w throh going tome cas a arwhen y theli d nue an ,in a" be? google's numbers last week might have been good on several metrics it doesn't transfer over

to yahoo!. i'm not sure you're go fog get that with yahoo! tonight. >> ron what do you think? are they headed in the right direction? are you above the wall street consensus of 11 cents a share or below it 4? >> look at the company. we like the skok and we have an overweight on the stock. when you look at revenue growth rate a couple of things to keep in mind, their affiliate businesses that the partnership revenue is not growing that fast, so that's hurting them. also doing a lot of cleanup. for example, yahoo! they are doing a lot of cleanup, that's negatively impacting the growth rate. look at the headline number it looks bad but it's not bad as many fear. >> that's okay. >> martin, i want to ask you a question. anything that yahoo! does that no one else doesn't do better? >> no, and that's one of the challenges or problems, i think they're facing right w that thdooyt

cepttter. tey ktric i'm ng for in the results, compares to google last week, you saw google get a pricing lift. in other words, advertisers are willing to pay up, get a better return on the yaad words. rps, that number has to start to come up, if there's any pricing power. number within, it's a key metric and also indicative of whether advertisers are shift anything money to yahoo!. right now it's going the other way. >> how do you rate it, marten? how do you feel about the stock? >> i'm neutral here at 16ish. it's a work in progress, the cost side i'm comfortable on. carol's done a good job in assessing landscape and getting the low, hanging frut out of i there. it's not cheap enough to be valued. ar jimgoman,wh uowth. n itherows up?! started as a guide to other

websites then going at the community during the bubble then it was in the search business and bailed out of that. not i'm not sure what they want. >> that's a real plaeroblem. carol bartz is the first to say as don't look at us as a competitor with google look at us as our own individual operation we because we are communities, we are sports, business news. we are a portal. we are this. we are that. well, the problem is, when you try to be all things to all people you end up being nothing to everyone. that's what yahoo! is fighting. >> i always felt 400 million, 500 million registered users is a great asset they haven't figured out how to unlock the value for it. >> right. i want to point out, first of all yahoo! has 600 million unit users. they're not trying to be number one search. we don't expect them to be number one search. yahoo! is the largest finance

site on the web. yahoo! sports has more traffic than espn. you know, there is money for search. search is half of the online advertising revenue. the other half of the money is not online search advertising. look at roughly 5% of the brand dollar is guying on line, the dollar should shift online. >> rom for growth. >> there is room for growth. >> thank you. tyler? >> mr. neil, up next, head to the floor of the big board to check the market action. steve grasso will be there. we'll drill down on the outlook for oil and natural gas. we'll ask merrill lynch chairman. ford announcing a new plant, new jobs. phil lebeau gets behind the wheel. apple, 211.64, up 4.25%. 3

welcome back to "power lunch." mime matt nesto. let's take a look at shares of baerps and noble. we've been tracking the stock since the opening bell. it had been the number one pomer in the russell 1,000. it has shed 7% in the past 90 minutes. volume is pigging up. that's triggering trade to take a look. one analyst said it's a selling opportunity and rumor that its e platform for books would be included in the new apple tablet may very likely well prove to be false. barnes & nobles, giving it back fast. back to you. let's go down to the new york stock exchange and get the analysis from steve grasso of

stuart frankel. what are stocks reacting to today? >> if you look at volume, i'm not sure if we're just looking that the lead-in from the apple story or if we're looking in for the lead-in on financials rebounding back. but i still think people are waiting on wednesday. >> waiting on wednesday for? >> waiting on the state of at doun down. we want to hear what president obama has to say, what the fomc has to say. the market has been a wait and see approach for the last couple of months and we're not changing at this point. >> we have a poll out, asking is geithner good for your money. 77% of the respond inters say n no. it's not a scientific poll. there it is. if you were to ask the poll of the people on the floor, what would the response be? >> i think we get back to that statement i made yesterday to dennis, perception's reaelt. so the market has come in, people are worth less than they once were.

geithner is steering the ship with ben bernanke, people don't appreciate them in the place they are but i don't think -- they are the cause of it. >> steve, thanks very much, sounding off on the treasury secretary. you can, too on our poll on cnbc.com. jim cramer will give us his take on "street signs" with erin burnett at the top of the hour. rising inventories, china's clamp-down on credit. joining us is tom petrie, vice chairman of the investment bank, focus on energy. good to see you, tom. >> good to see you, sue. >> it's been a while. we haven't had a chance to talk about the impact that china seems to be having right now if indeed they are clamping down on growth or loans or lending or a combination of all of that. what does that portend for oil prices short term and long term, in your book? >> well, it could be important because china's the biggest

source of growth as we look at the next three year, five years and ten years in most expectations that you see. but let's keep in mind, resource maturity's important, too. and that's twice as big, in terms of the embedded decline. so i'm not ready to throw in the towel on future expectations based on china but it's an important warning sign. it's a yellow flag if you will. >> the other interesting story that we've been following in the energy complex, the disconnect between natural gas and crude oil. will that disconnect continue, do you think? >> i think so. what you have going on is a great new supply story on the natural gas side, combination of growing aveilability of liquefied natural gas and the new prospects for growth of gas in north america. you're going to have gas on gas competition. probably well into the decade, the middle or latter part of the

decade. and so that keeps gas pres i a zone sewhat below the better iced prospts foroil,ven considering whate were talking out on china. >> given wha we have olaid fochina, where would you be putting invtment money domestically to play the nat gas play or overseas? >> wel i think there's a -- there's somepportunity in both areas in the near to immediate term i think we are seeing early signs of a recovery in the oil field services for gas development in north america. halliburton told us that in their most recent report. there are other signs. interestingly, one of the perverse impacts of increased regulation from the epa is going to be an incentive for more gas consumption. that's also going to contribute to that. longer term, i think there's also international opportunities, but in the near term natural gas oil field prospects are pretty good. >> outside of the united states,

you look at west africa, brazil, venezuela? >> yes, not so much vds venezue v-but west africa and brazil. as we heard from the saudi oil minister recently, we're in a pretty good zone a sweet spot, if you will for pricing. $70 to $80 oil most of the time is high enough to be incentive for new oil development, not so high too contribute incremental demand destruction. >> good to see you. today on "street signs," 2:00 p.m. eastern time, exclusive interview with gregory boyce. his company shares up more than 90% in the past 12 months about. shares of ford are up nearly five-fold over the past year. today the automaker revving up a plant and creating jobs. phil lebeau's in chicago with more. >> reporter: dennis, this is welcomed news on south side of chicago, where the plant has

been undercapacity. start with the ford news. 1200 jobs coming to the chicago plant as ford brings the new production for the new explorer, that's going to big next year. that's the news with ford. meanwhile, general motors is adding jobs on the east coast. those will be announced this afternoon as part of an electric motor division, in a maryland plant. gm adding jobs for electric car production. automakers are starting to phase out jobs. take a look at numbers over the last year, compared to the recent announcements of jobs being added. added, maybe 6,000. cut in 2009, look at that, 170,600. we're a long ways from the industry making up for last year. >> good news but it's something you have to understand it's not a turnaround yet. it has to be approached cautiously. >> look at an tri right now, automakers are starting to get back to ramping up production

for the next generation of vehicles. we're a long ways to making up jobs that have been cut over last year and a half. >> thank you. up next, budget deficit will hit 1.3 trillion this year. the president wants to free some spending. congress thinking about an $80 jobs bill. good idea or not? >> the dow, still kind of holding its own, up 74 points to 10271. s&p a tad over 1100. fees

senate democrats are considering an $80 billion job stimulus bill, this as the budget deficit expected to hit $1.35 trillion this year. is it the right move? opposing views from democratic strategist chris kofisinis and congressman j.d. hayward the president wants to restrain discretionary spending and the other side with democrats and put more money in a jobs program. >> well, i think it's a realization that you obviously want government to work as efficiently as possible. so this spending freeze and cutting the deficit projected over $250 billion cut over the next decade is a good step forward. it addresses, i think, a lot of the concerns but you have an economy that turned around. we've gone from losing 700,000 jobs to losing 50,000, $60,000 jobs. the question is do you want to continue to push to make sure

that becomes positive jobs growth? they don't always -- it doesn't necessarily seem that they go together but it's not contradictory at all. it part of a smart economic plan. >> i understand there's 300 billion to $400 billion of last year's stimulus money still unspent and scheduled to be spent this year. wasn't that suppose stod create jobs? why do we need $80 billion more to do the same thing in. >> you don't throw worse money after bad money. you know what's going on here, tyler? a combination of things in popular culture in the senate, for the senate democrats it's a star trek moment. you've got harry reid, the hearing from panicky senators like senators say, do something. here's $80 billion to go with the $800 billion we haven't spent the remaining should be used for deficit reduction. you do not build the economy and create jobs with command and

control top-down authoritarianism the administration is advocating. >> well i think mr. heyworth hey be trying out for the arizona primary early. i mean, listen, i think the reality here is we had done with what hayworth recommends the economy would be in a depression. the republicans can squawk all they want about the fact that this president was forced into doing the dramatic type of measure his did in order to save this economy, turn around a series of financial crisises that no other president has faced since the great depression. but what mr. hayworth and others don't want to admit, they were the ones responsible nep were the onces that mismillion milla economy. >> stop looking backward and start looking forward. i don't understand how if we spent $787 billion on stimulus, and our unemployment rate rose, why another $80 billion is going do the trick, j.d.

>> you nailed it, it doesn't. it throws worse money after money already badly ste lly spe. i'm okay now but you should have seen me during the last presidential term. no, the fact is, listen, you've got to get control, you've got to bite the bullet and you have to go through the necessary cycles to restore the economy and you don't do that with -- >> wait a second. tell us whether you are willing to cut defense spending. where do you want to cut? where would you like to cut? >> i would cut -- it's across the budget. >> to use the term in washington, the discussion, chris, mr. hayworth, thank you as well. >> a big one coming up next. he dominates the music industry. he's calling for cheaper prices on tv downloads and he may, supposedly, save the dying print business. so is steve jobs really the king of all media? news to howard stern. a strong performance for the

dow and other indexes today. industrials up 82 points at this hour on strong earnings from the likes of travelers and dupont.

the king of all media, no, not talking about howard stern, i'm not talking about myself. emean steve jobs. revolutionized the music wants to do the same thing tv shows. joining us michael wolff and cnbc reporter julia boorstin. the jobs, the music industry's glad he came in but upset that he took control of the pricing. maybe the tv guys should start worrying. >> reporter: more than tv, dennis, we have to look at publishing industry. seeing declining subscription revenue, advertising and steve jobs could create a viable, digital revenue business for them. with this new tablet they could start charging for their content.

this is great news for magazine companies, "sports illustrated" has been promoting what digital "sports illustrated" would look like. great news for the newspapers. "the new york times" is adapting its iphone app for the new tablet. these are companies that are looking at the new tablet as anew way to charge for the content that they give away for freon line. >> michael, every time think that i think steve jobs is overhyped and overrated he ends up come through with another product hit. are we overestimating him yet again this time? >> we're overestimating. he's hit the wall. why would the guy want to go in and try to dominate a dying business? i can't, for the life of me, understand. >> reporter: he's not dominating a dying business. he's giving a chance for different media companies to charge for content. >> understand what you're saying here. understand what you're saying here. here is a guy who is -- whose credibility entirely is on the new media side and now he's

saying, no, i want to become a big player in the old media business. why would you want to be a big player in the old media business? >> julia? >> why would you want to contribute to "the new york times" when nobody wants it? >> reporter: he is creating a device that will allow viewers to access all content. if "sports illustrated" can create a really cool application for this new device that includes video, that's not old media. that's a new way to showcase what the "sports illustrated" brand is about. >> that's what these guys have been doing. like spor"sports illustrated" succeeded in the internet space or the television space, which they didn't do, by the way. you know, so you are at this -- you've set up the thesis here which is essentially we can create a machine that will breathe new life into these old products. >> into reading. >> we created that machine, by the way.

it's called the internet. and they didn't succeed there. >> reporter: it's not creating this device in order to help this dying industry. he's creating this device to give people something that they could carry with them and access whatever contend they want wherever they are. i think the businesses that are going to benefit most, whatever steve jobs' intent is, the business that will benefit most are publishing companies. >> guys, we have to wrap. >> steve jobs, the businesses don't benefit. the music industry has not benefitted from this. it's become a captive to it. so that's on the industry side. on apple's side, you know, as i say, i don't get it. i don't see it. >> michael, thank you. julia, thank you. >> we'll update you on the markets. holding on to an advance. the fed meeting beginning today and continuing tomorrow. that's overhanging the market a little bit. back in just a moment.